Monday, March 30, 2015

Community foundations preserve family legacies and keep farms going long after owners are gone

Community foundations are becoming more common in rural America, and many allow farmers to give a portion of their land to the community. That leaves a legacy and allows farmers to keep their farms up and running long after they retire or die, Elizabeth Williams reports for DTN The Progressive Farmer.

Patrick Costello, a Minnesota attorney and rural advocate, said the state changed "its anti-corporate farming law to allow individuals and private foundations to make retained farmland gifts to public charities as exit strategies either upon closing up foundations or making estate plans," Williams writes. "Small hospitals or small churches that found themselves going out of business also had another option of handling their farmland assets, Costello added." Costello told her, "Farmers spend a lifetime putting together a farm unit, and they really hate to see it split up and sold off, even after they've gone."

For example, 79-year-old Minnesota farmer Glenn Krog has no children, and his sole employee is also childless, Williams writes. Krog "gifted a half section of farmland to the community foundation's 'Keep it Growing' program two years ago. Krog and his employee have the benefit of farming it until they pass away. Krog's niece will inherit the rest of his farm. Then, whoever is farming the home farm owned by Krog's niece has the right of first refusal to rent the portion owned by the foundation after the death of his employee."

Another plus is a double tax benefit for making an annual charitable donation, which has whittled down Krog's estate value, reducing his future estate tax exposure. Williams writes.

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